Publication | ThinkSet

The Imperative of GHG Emissions Management for Natural Gas and LNG Supply Chains

Christopher Goncalves and Athanasia Arapogianni Konisti

Fall 2023

As decarbonization efforts evolve and ESG concerns pick up, natural gas and LNG stakeholders must focus on greenhouse gas emissions abatement.

In the twenty-first century, global decarbonization efforts in the power generation and industrial sectors have largely focused on fuel switching: increasing the use of cleaner natural gas, liquified natural gas (LNG), and renewable energy to replace coal and oil. North America and Europe have been at the forefront of these efforts. Over the last two decades, the share of coal usage for power generation has steadily decreased in North America (falling from 49 to 22 percent) and Europe (from 33 to 18 percent). In sharp contrast, the share of coal in Asian markets has increased from 63 to 71 percent.

Yet as renewables become more cost effective and accessible, decarbonization strategies and policies have begun to turn against natural gas and LNG. For example, the International Energy Agency (IEA) envisages a significant increase in the use of renewable energy, decreasing demand for natural gas, and diminished use of coal and oil over the next two to three decades. For natural gas to remain in the energy mix during the transition to a decarbonized world, even at the decreasing pace outlined in the IEA’s net-zero scenarios, greenhouse gas (GHG) emissions along its supply chain should decrease significantly. Indeed, the Intergovernmental Panel on Climate Change (IPCC) notes that reaching net-zero GHG emissions (NZE) will require deep reductions in CO2, methane (CH4), and other emissions.

This emerging state of play will create challenges for the natural gas industry. But for those who can abate GHG emissions successfully, it also presents substantial economic opportunities. Here’s what executives should know.

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Christopher Goncalves

Managing Director

Washington, DC

Athanasia Arapogianni Konisti

Associate Director